Telco reseller, James Harrison and his companies, SoleNet and Sure Telecom, have been fined $250,000 by the Federal Court, and banned for selling telecom services in Australia for three years.
The companies first came under scrutiny in April 2016, when the Australian Competition and Consumer Commission (ACCC) took the Harrison's companies to court over “unconscionable conduct".
The ACCC subsequently proved the companies failed to seek customer authorisation for transferring their contracts to other Harrison companies, and then harassing them not paying early termination or cancellation fees.
In orders that take effect 1 April 2017, the court disqualified Harrison from managing corporations for three years.
“The disqualification of Mr Harrison as a director sends a clear message that directors have responsibility to ensure their businesses comply with the Australian Consumer Law,” ACCC Deputy Chair, Delia Rickard said.
In delivering his judgment, Justice Moshinsky noted “the contravening conduct was serious, deliberate and extended over a period of about two to three years” and “was not ad hoc, but systemic and planned”.
The judge also noted that “Harrison, the sole director of the companies, was ‘hands on’ in managing their day-to-day operations and was intimately involved in their conduct”.
The court also made orders for the SoleNet/Sure Telecom companies and Harrison to take all reasonable steps to make refunds within 60 days to customers whose contracts were transferred or purportedly transferred from one SoleNet/Sure Telecom Company to another without their knowledge or informed consent and had paid early termination or cancellation fees and pay the ACCC’s costs.
Since 2011, various Harrison companies have provided telecommunications services to residential and small businesses.
In December 2016, the Court found the SoleNet/Sure Telecom Companies had engaged in unconscionable conduct in connection with the supply of telecommunications services.
The court also found that, between 2013 and 2015, the SoleNet/Sure Telecom Companies were restructured in part to avoid regulatory sanctions and unpaid debts to regulators.
As part of this process, customers were transferred from one SoleNet/Sure Telecom Company to another without their knowledge or informed consent, and were then subject to unjustified demands for payment of early termination or cancellation fees, when there was no legitimate contractual basis for the SoleNet/Sure Telecom company that was seeking the payment to demand payment.